1. What are the details of the Commonwealth’s commitments to Amazon?
The Commonwealth’s partnership proposal to Amazon includes three focus areas:
- First, our proposal focuses primarily on expanding the Commonwealth’s tech talent pipeline. This aspect of the proposal is based on the recognition that as with other major employers, the critical path for growing Amazon’s core businesses and emerging pillars is attracting, developing, and retaining world-class talent. These investments will also benefit tech employers statewide.
- Second, we included investments in transportation infrastructure that will improve mobility in order to minimize impacts on the region. As part of this investment, the Commonwealth plans to invest up to $295 million of non-general fund money to projects that will provide robust, multi-modal connections between National Landing and the region, benefiting all citizens and companies in the area.
- Third, we included a post-performance incentive offering with annual payments to be made only after the company has produced new, qualifying jobs. Because the payments will be provided only after the jobs are created, the incentives will generate net positive revenue for Virginia from day one and will produce a more than six-to-one return on investment over the term of the performance agreement.
2. What are the Commonwealth’s investments in the tech talent pipeline?
The foundation of the Commonwealth’s proposal to Amazon is a comprehensive statewide investment program to more than double Virginia’s already robust tech-talent pipeline. Specifically, Virginia plans to double the annual number of graduates with bachelor’s and master’s degrees in computer science and closely related fields (split approximately 50/50 between bachelor’s and master’s degrees). This will ultimately add 25,000 to 35,000 additional graduates in excess of baseline levels over the next two decades.
To expand the number of bachelor’s degrees, the Commonwealth will establish a performance-based tech talent investment fund, with General Assembly approval. This fund will enable higher education institutions across Virginia to receive startup funds for faculty recruitment, state capital investment (where required), and enrollment funding to expand the number of bachelor’s degrees the institutions confer annually in computer science and closely related fields (e.g., computer engineering). Participating institutions, including both public universities and community colleges, will enter into an agreement that details their plans for growth, state funding commitments, annual reporting requirements, and future funding parameters associated with performance.
To expand the number of master’s degrees, the Commonwealth plans investments of up to $375 million for academic space and operational support over the next 20 years. These performance-based, master’s degree investments will be provided to George Mason University for its Arlington campus and Virginia Tech for a new campus expected to be located in Alexandria. State financial support will be contingent upon the institutions raising philanthropic funds on a dollar-for-dollar matching basis for these investments.
In addition to these higher education investments, building the tech talent pipeline starts with a public K-12 system that includes an integrated STEM and computer science curriculum for every student. Virginia will invest $25 million in the K-12 STEM and computer science experience for students and teachers over the next 20 years. This investment will enable the Commonwealth to provide ongoing professional development to current and future teachers; create, curate, and disseminate high quality curriculum and resources; support summer and after-school programming for students; and facilitate meaningful career exposure and work-based learning opportunities in high-demand fields. Additionally, the Commonwealth will invest $25 million to expand tech internship opportunities for higher education students to better connect them to tech jobs over the next 20 years.
3. What are the Commonwealth’s investments in infrastructure?
The Commonwealth of Virginia, Arlington County, and the City of Alexandria are planning competitive investments in transportation infrastructure that will benefit the National Landing site while strengthening northern Virginia’s regional transportation system.
Subject to Amazon’s job-creation performance, the Commonwealth has committed up to $295 million of non-general fund money to invest in transportation projects that will provide robust, multi-modal connections between National Landing and the regional transportation system. These projects will be effectively funded with resources that could not otherwise be used anywhere outside of northern Virginia. The projects include additional entrances to the Metro stations at Crystal City and Potomac Yard, improvements to Route 1, a connector bridge from Crystal City to Washington National Airport, and a transitway expansion supporting Pentagon City, Crystal City, and Potomac Yard.
Similarly, Arlington County and the City of Alexandria have already committed over $570 million to date for transportation projects, including rail connections, transit facilities, multi-modal streets, and corridor connectivity. These investments will strengthen multi-modal connectivity at National Landing while advancing high-quality placemaking and amenities for both Amazon’s new headquarters and the public in those localities.
A review of available transportation services, facilities, and associated capacity indicate that the regional and local transit systems have significant unused capacity, even during peak travel periods. Local transportation officials expect that most of Amazon’s employees will utilize public transit, walk, bike, or carpool on their commutes each day.
4. What are the post-performance incentives the Commonwealth offered?
While Virginia’s proposal primarily focuses on new investments in public assets that would benefit companies and citizens across Virginia (in particular, doubling Virginia’s tech-talent pipeline), it also includes a performance-based incentive offering. The incentive requires that annual payments to the company be made only after the company has produced new, qualifying jobs. The incentives will be paid annually based on job creation and wage levels in the prior year.
The actual amount of incentives paid to the company will be determined by the number of jobs created and the average wages. The minimum average annual wage is $150,000, plus benefits, escalated at 1.5% annually. The company will be eligible to receive up to $550 million in incentives if it creates 25,000 jobs and up to $200 million in additional incentives if it creates a total of 37,850 jobs. Because the payments will be provided only after the jobs are created, the incentives will generate net positive revenue for Virginia from day one and will produce a more than six-to-one return on investment over the term of the performance agreement.
5. What are the details of Amazon’s commitments to the Commonwealth?
Amazon, Inc. will invest approximately $2.5 billion to establish a major new headquarters in National Landing. The company will employ at least 25,000 professionals within approximately 10 to 12 years, with the potential to grow to 37,850 jobs around year 15. Amazon will pay an average annual salary of at least $150,000, plus benefits, escalated at 1.5% annually.
Amazon’s new headquarters is expected to generate approximately 15% to 25% of the additional jobs needed for Virginia to regain a top 10 state ranking for growth. In addition, these investments will keep thousands more college graduates in Virginia and help reverse Virginia’s recent trend of domestic population out-migration.
6. Where will Amazon’s new headquarters be located?
Amazon’s new headquarters will be located in National Landing, the newly-defined interconnected and walkable neighborhood that includes portions of Pentagon City and Crystal City in Arlington County, Virginia and Potomac Yard in the City of Alexandria, Virginia. Located adjacent to Reagan National Airport and across the Potomac River from Washington, D.C., National Landing is one of the Capital region’s most accessible, urban, mixed-use communities. It is defined by its central location and its existing mixed-use urban environment, including offices, apartments, and hotels.
Amazon intends to lease existing space and purchase land for development from JBG SMITH in Crystal City and Pentagon City in Arlington County, while the new Virginia Tech Innovation Campus is expected to be developed in the Alexandria portion of National Landing. National Landing has over 12 million square feet of existing office space and more than 13,000 residential units. JBG SMITH controls over 8 million square feet of development within National Landing.
Since mid-2017, JBG SMITH has focused on a comprehensive plan to reposition National Landing through a broad array of strategic placemaking strategies. These include the delivery of additional ground-up residential and office development, locally-sourced amenity retail, and investments in public assets, including streets, sidewalks, parks, and other outdoor gathering spaces. By creating a vibrant street environment with a robust offering of amenity retail and improved public spaces, National Landing will become known for its pedestrian accessibility and vitality. Amazon’s new headquarters and related investments are consistent with the adopted community growth plans for the National Landing area in both Arlington County and the City of Alexandria, which envision high-density, mixed-use, transit-oriented development.
7. What are the statewide benefits of the project?
The economic benefits of the Amazon project will be shared across the Commonwealth.The project is expected to result in more than $3.2 billion in new state general fund revenues over the 20-year incentive term with Amazon, after accounting for direct company incentives. These new funds can be used for investments in education, infrastructure, and other priorities across all corners of Virginia.
Further, the project will bring tens of thousands of new high-tech jobs, which will diversify Virginia’s economy, reduce our overreliance on the federal government, and dramatically strengthen our largest traded-sector growth industry: technology. While the proposal includes post-performance incentive offerings, it focuses primarily on public investments that would benefit firms and citizens across Virginia, particularly statewide investments to double our tech-talent pipeline.
Finally, because state sales tax revenues dedicated to education are distributed by enrollment, public school systems outside northern Virginia will experience a cumulative increase of approximately $200 million or more in state K-12 funding support over 20 years.
8. What are the types of jobs and salaries that Amazon will offer?
Roughly half of the employment at Amazon’s new headquarters is expected to be technology jobs, including software development engineering, artificial intelligence and machine learning, user interface design, and user experience design. The other half of the positions will include executive and managerial roles as well as legal, accounting, and administrative occupations. Amazon will offer a minimum average compensation of $150,000 per year, plus benefits.
9. How will the state and region address affordable housing in the communities surrounding the site?
In recent decades, Virginia has made substantial progress toward improving the quality of housing and the living environment of all Virginians. The Commonwealth, Arlington County, the City of Alexandria, and a variety of local and regional partners are all working to address the housing needs of the region in a more concerted and dedicated way as a result of this partnership proposal.
Arlington County and the City of Alexandria plan to fund affordable housing, workforce housing, and public infrastructure, relying on revenues generated from Amazon’s new presence in their communities. Combined, the communities project investments of at least $15 million annually over the next decade, resulting in the creation and preservation of 2,000 to 2,400 units in and around the Crystal City, Pentagon City, and Columbia Pike areas and through the City of Alexandria.
The Virginia Housing Development Authority (VHDA), which is Virginia’s statewide organization designed to help Virginians attain quality, affordable housing, has a number of statewide programs aimed at both affordable rental housing and homeownership loan programs. VHDA’s existing programs include $300 million per year for rental housing and $600 million per year for homeownership financing in the northern Virginia region. In addition, VHDA will work with Arlington County and the City of Alexandria, and will provide an additional $15 million per year for five years for affordable and workforce housing in northern Virginia.
The private sector is also working to address housing affordability. JBG SMITH and the Federal City Council recently announced the launch of the Washington Housing Initiative, a transformational, market-driven approach to producing affordable housing in the Capital region over the next decade. The initiative brings together capital from private and philanthropic sources to preserve or build affordable workforce housing in mixed-income communities, specifically targeting working families. The initiative expects to source external capital for the purposes of preserving or building between 2,000 and 3,000 units of affordable housing in metro Washington over the next decade.
In furtherance of a broader housing affordability strategy, leaders from Arlington County, the City of Alexandria, the District of Columbia, Enterprise Community Partners, Inc., the Greater Washington Partnership, the VHDA, and the Washington Housing Initiative have been working to create strategies to ensure the region is best positioned to respond to the housing needs of its future workforce. The group is finalizing a more formal framework that will create a new regional funding mechanism, supported by the private sector, local jurisdictions, and the state/district.
10. How will the state and region address traffic in the region?
The Commonwealth of Virginia, Arlington County, and the City of Alexandria are planning investments in transportation infrastructure that will benefit National Landing while strengthening northern Virginia’s regional transportation system. Arlington County and the City of Alexandria are also actively pursuing additional funding opportunities to advance investments in this corridor.
A review of available transportation services, facilities, and associated capacity indicate that the regional and local transit systems have significant unused capacity, even during peak travel periods. Local transportation officials expect that Amazon will help fill that existing capacity, as they are a very transit-focused employer, with most employees utilizing public transit, walking, biking, or carpooling each day.